Mobile Banking Needs “Standardized Innovation”

Francisco Noguera — Thu, 15 May 2008 15:06:47 -0400

May 15, 2008 - 13:00, CGAP Technology Program Blog

Story Link: http://technology.cgap.org/2008/05/15/mobile-banking-needs-standardized-innovation/

Teaser:
By Jim Rosenberg

"Standardized innovation" is the phrase used by Dialog Telekom's (Sri Lanka) Dr. Hans Wijayasuriya at the Mobile Money Summit in Cairo today. In a phrase I think is quite useful, he was summarizing the need to have mobile banking standards, interoperability, worldwide. Right now we are observing many proprietary systems taking shape - most notably, M-PESA in Kenya, Smart Communications, and as they move further into the m-banking space, Western Union. Imagine having hundreds of transaction networks - Visas, Mastercards - that don't talk to each other. Hopefully, that's not the direction in which mobile banking is headed. Proprietary is fine, interoperable is essential.

By Jim Rosenberg

"Standardized innovation" is the phrase used by Dialog Telekom's (Sri Lanka) Dr. Hans Wijayasuriya at the Mobile Money Summit in Cairo today. In a phrase I think is quite useful, he was summarizing the need to have mobile banking standards, interoperability, worldwide. Right now we are observing many proprietary systems taking shape - most notably, M-PESA in Kenya, Smart Communications, and as they move further into the m-banking space, Western Union. Imagine having hundreds of transaction networks - Visas, Mastercards - that don't talk to each other. Hopefully, that's not the direction in which mobile banking is headed. Proprietary is fine, interoperable is essential.

That said, who will pay for interoperability? If I am a service provider, why should I subsidize/pay for the infrastructure that could benefit my competition? Visa/Mastercard and the like were not interoperable at first, and we might well expect the same in the mobile banking space. So initially, it makes sense that the field of mobile banking is developing the way it is.

This week our team has been in Cairo for the first ever Mobile Money Summit. Organized by CGAP, DFID, IFC and the GSM Association, 429 delegates from 67 countries gathered to hear from telecom CEOs, banks, microfinance organizations, solution providers, and regulators. GSMA tells us that delegates were more or less evenly comprised of these four groups: telecoms, financial service providers, vendors, and the NGO/government/donor community.

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Mobile Banking Needs “Standardized Innovation”